Equity Bottom-Up

• We are bullish on Recruit at the current share price and believe that the stock has around 40% upside potential to our fair value estimate of Y7,700.
• We believe that investors have been overly concerned with the cyclical slowdown in the job market as it normalizes from the post-Covid recovery
• Indeed.com remains a disruptor in the HR recruiting market and the potential monetization of this asset is significantly under-appreciated by the market.

• Baidu reported revenue/non-GAAP operating profit/GAAP net income inline/7.72%/66.1% vs. our estimation.
• We believe short term cyclical and medium term AIGC-led upswing in advertising can bridge Baidu’s long-term business, which we do see them difficult to monetize.
• We maintain a BUY rating and adjusted TP to US$157, implying a 14.6x PE. It is currently trading at 11.4x PE in 2024.

• TSMC is expected to experience growth of ~15% YoY in 2024F.
• TSMC’s N3 is expected to dominate the market in 2024F, with applications in CPU, GPU, smartphone SoC, and more.
• We also estimate that the N2 pilot run will begin in 4Q24.

• Full Truck Alliance reported strong growth in Q3, from the right sources
• Improved sales mix & progress on expense control lifted core margins
• With 22% upside to US$9.5 based on 21x PER, our high conviction pick

• In this insight, we provide the income statement comparisons of the eight largest global luxury brand Korea operations including Louis Vuitton Korea, Prada Korea, Ralph Lauren Korea, and Moncler Korea.
• In 2022, Korea spent $16.8 billion in luxury goods, representing per capita consumption of $325 per person, surpassing the United States ($280 per person) and China ($55 per person). 
• Luxury brand spending in Korea is often a leading indicator of global luxury brand spending. Luxury brand spending in Korea has been weak this year and this continued in 3Q23.

• In October, the sluggish recovery in outbound tourism demand continued
• Outbound capacity growth also timid; but domestic recovery is mostly complete
• As growth stock, Trip.com’s disappointed; maybe it can attract value investors?

• TSMC: 8.2% Premium — Still Best to Wait for Better Levels
• ASE: 6.4% Premium — Wait for 5% as the Level to Go Long the Spread
• ChipMOS: -0.5% Discount — Stay Long the Spread if You Started at -2.0%

• China Education Group (839 HK) appears to be facing the headwinds from higher USD interest rate and reduction in capitalised interest. The intangible write-off is another drag on FY23.
• Newly registered students increased 17.8% for FY24. With better average fees, this will help the topline. Our concerns are high finance and operating costs will erode revenue growth.
• Consensus is overly aggressive and there are risks of downgrade. Earnings may re-accelerate in the future, but weaker 1H FY24F keeps us on the sideline in the short term. 

• October’s industry numbers hide pricing turmoil seen at company level
• STO Express appears to be using price to gain share from Yunda, others
• We believe price competition continues to hurt ‘ground’ express margins

• The real value of Sinocelltech Group (688520 CH)’s pipeline will be greatly discounted because in the current context of fierce homogeneous competition, the commercialization performance of latecomers will be bleak.
• Through frequent capital operations, in two and a half years, valuation of Sinocelltech was successfully raised by nearly 300 times. However, the Company’s owner’s equity is negative, with delisting risk. 
• The SSE STAR Market has been full of bubble if compared with HKEX. Sinocelltech has been severely overvalued. We think the reasonable market value of Sinocelltech is around RMB15-20 billion.

• Vinfast (VFS US), a Vietnamese EV manufacturer and a majority-owned affiliate of Vingroup Jsc (VIC VN), completed its merger with Black Spade on 14 August. 
• Due to the low float, the shares have been on a wild ride, with the last close of US$6.56 materially below the high of US$82.35 per share.
• VinFast remains an avoid due to related party-driven EV sales, declining customer traction, operating losses, cash burn, equity raise overhang and frothy valuation.  

• Tesla Motors (TSLA US) market share in China has decreased and its 3Q23 operational data suggested it offered discounts to defend its market share. 
• Albeit losing some market share, BYD (1211 HK) operational data is much more solid, even expanded its profit margin during a difficult environment in China. 
• Tesla share price has outpaced BYD’s this year by 70%, it should reverse in the next year.

• It is the upfront payment rather than the total or subsequent milestone payments that indicates the gold content of license-out collaborations. We analyzed our criteria.
• Investors actually don’t need to worry too much about the NRDL negotiation results, because the NRDL price of domestic innovative drugs has become relatively stable. There are basically three levels.
• We analyzed key points about China Resources Sanju. Considering the impact of anti-corruption in 23Q3 and the weak performance of TCM formula granules business, 23H2 performance could be under pressure. 

• Tongcheng Travel Holdings (780 HK) is best positioned to capture post-COVID travel, especially in lower-tier cities. This is reflected in a 146.5% growth in 3Q23 adjusted net profit.
• The cooperation with Tencent (700 HK) continues to bear fruits and will drive accelerated momentum as it leverages on QQ Browser, Weixin mini-program, and Tencent Docs.
• 3Q23 net cash increased 1.5x from the end-FY22 level and now represents 10.9% of market capitalisation. Its earnings valuations are attractive relative to both growth and peers.

• Trip.com’s domestic hotel bookings increased by 70% over pre-COVID 3Q19.
• Xiaomi’s revenue began to grow in 3Q23 after decreasing for five quarters.
• China home appliance export surged in October, for example, fridge export amount growing by 42% YoY.

• The FSS has launched a formal investigation into KB Kookmin bank due to potentially massive losses related to the HSCEI linked ELS products. 
• The three major listed banking groups (KB Financial, Shinhan Financial, and Hana Financial) could be burdened with nearly 86% of the HSCEI linked ELS losses (close to 2.6 trillion won). 
• Major Korean banks may need a “Hail Mary” pass to avoid this disaster. Such positive outlook would include sharply rising HSCEI index in 2024, similar to what happened in 2016. 

• Following 2Q24 , our operating profit of S$2.9bn and a net profit of S$2.6bn, stand considerably higher than consensus of S$2.5bn and S$2.3bn respectively. 
• SIA’s continue to suffer more inflation than most peers (ex-Qantas). However, 1H24 illustrated that continued restoration of capacity is diluting pressure and narrowing the gap to peers.
• The true test for SIA will be management of normalizing profitability beyond FY24. We model operating profit of S$1.8bn/net profit of S$1.5bn in FY25, versus consensus of S$1.5bn/S$1.2bn.

• Uchi Technologies (UCHI MK) reported a 15% YoY revenue growth/ 27% YoY operating profit growth led by constant USD revenue growth of 10% YoY and 4.5% MYR depreciation. 
• Profit grew only 3.5% YoY due to an increase in the effective tax rate from 2.8% to 21.0% as the company’s tax holidays lapsed earlier this year.
• Trading 12x PE, 7.5% dividend yield (based on a 90% payout), >30% ROE, and more than 10% of the market cap in cash; this a stock to explore. 

• Classys (214150 KS) reported solid performance in 3Q23, with revenue and operating profit growing 45% and 41%, YoY, respectively, mainly driven by export in devices and domestic sales of consumables.  
• Despite being an offseason, Q3 2023 witnessed increase in both the number of countries selling the new product Ultraformer MPT and the monthly average domestic sales of Volnewmer.
• Continued improvement in equipment sale and increasing consumables contribution should drive growth in 2024. Entry into the U.S. and China will be the key for re-rating of the stock.   

• All positives from management: strong demand, loads and yields strong, cargo improving, costs are high but can cope, big profits coming but have to redeem preference shares  
• The near-term future is a golden runaway for Cathay Pacific. All the parameters are in the right place and we think this will persist until 1H-2024 at the very least 
• Cathay Pacific is a value BUY, our target price of HK$9.90 (+21% UPSIDE) implies 10x FY2024 PE, parity multiple against its arch-rival Singapore Airlines (SIA SP). 

• We are positive on Orion Corp. Regardless of the overall market movement next year (up or down), we believe Orion Corp could outperform KOSPI in the next 6-12 months.
• The company has millions of loyal customers in major overseas countries including China, Russia, and Vietnam. Despite difficult operating conditions, Orion continues to generate stable growth in sales and profits.
• Orion Corp’s valuations are attractive. Orion Corp is currently trading at 2024E EV/EBITDA of 4.4x (42% lower than average valuation multiple from 2019 to 2023).

• In Oct 23, Doosan Robotics (454910 KS) raised around US$318m through its Korean IPO, after pricing the IPO at the top end of the range at KRW26,000/share.
• Doosan Robotics (DR) manufactures and sells collaborative robots (Cobots). The firm’s product portfolio primarily includes different series of robot arms as well as its coffee module.
• In this note, we will talk about the company’s past performance and future prospects.

• We expect Meituan to report C3Q23 top line, non-GAAP operating profit and GAAP net income 2%, 4% and 20% vs. consensus. Our C4Q23 estimates are 6%, 19%, and 30% …
• Douyin’s in-store GMV growth decelerated in September/October, per local media. We believe there are two main causes, (1) local life’s share of Douyin video views is around 10%~, which…
• Douyin’s next threat to Meituan is food delivery, but GMV is less than 1% of Meituan food delivery in 3Q, we estimate. At the current trajectory, we expect Douyin…

• A company visit with Sumber Alfaria Trijaya revealed confidence in the outlook with its more aggressive store expansion on track, as it nearly draws level with Indomaret.
• The company remains focused on expanding its Lawson convenience store outlets plus larger size Midi outlets. Its membership scheme is growing fast with 10m shopping once a week. 
• Sumber Alfaria Trijaya (AMRT IJ) remains a core retail holding, with its premium valuation justified by its strong growth prospects, with estimated 2-year Forward EPS growth of +25% and +17%. 

• EM Fund ownership in JD.com continues to fall. Average weights slip to 4-year low as managers close out in large numbers.
• Between February 2023 and October 2023, there were 56 closures versus 6 openings in JD.com, led by managers at the growth end of the spectrum.
• Despite this, JD.com is still the 16th most widely held stock globally, with combined AUM among the funds in this analysis of $1.27bn.

• New Horizon reported a strong 1H2023 results. Company has upgraded its ’23 sales guidance.
• The company will continue to deliver strong sales growth despite recent anti-corruption movement in China.
• We believe that the evidence presented by the recent short-selling report is not sound. We believe the impact is over. 

• Kuaishou reported revenue/non-GAAP operating profit/GAAP net income 1.13%/35.0%/52.2% vs. our estimation.
• The bottom-line beats were primarily due to reduced S&M costs related to effective user retention strategies and the operation of the newly constructed data centre in Ulanqab…
• We maintain our BUY rating and raised TP to HK$78 for a positive outlook in the e-commerce business and viral playlets, stimulating advertising growth…

• Q1-2 FY3/2024 results were in line with revised company guidance, highlighting progress in growing prioritized businesses in the Strategic Areas segment such as Healthcare.
• However, the company is experiencing headwinds due to weakness in demand from the electronics sector and market divergence for EV battery cathode materials.
• Volumes have also fallen more than anticipated YoY in the legacy Automotive Catalyst Areas. 

• We turn positive on Banco PAN, for its consistently improving operational metrics to 3Q23, attractive valuations and sound capital adequacy
• Nubank is operationally strong but we remain cautious on Nubank shares as we see this neobank to be challenged by capital constraints, as well as being on stretched valuations
• Inter has been improving operationally, and is sound on capital but is in the shadow of PAN in terms of valuations; KakaoBank is sound operationally and one to watch

• Q3FY24 revenues of 18.1 billion, up 34% QoQ and up a staggering 206% from the year ago period. It was also ~$2 billion higher than the guided number
• NVIDIA’s current quarter forecast was for a further revenue raise of almost $2 billion with gross margins staying roughly flat at 74.5%
• Share price reaction was negative, closing down 2.5% the following day. But why?

• Oriental Watch (398 HK) reported an 8% YoY profit decline for H1 FY24 (Vs. our expectation of 10-15% growth) due to a higher taxation rate and lower margins in HK. 
• Despite that, the company distributed 100% of its profits for a 28.5 cent HKD/share dividend (15% annualized) and built net cash/investments to 1.25 bn HKD (62% of market cap). 
• Trading at 7x FY24e PE with abundant cash and real estate with a 15% yield, the stock is worth exploring with the perspective of building a high-yield portfolio.

• Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.
• GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
• In this note, we will talk about the company’s past performance and future prospects.

• Xiaomi reported C3Q23 top-line, non-GAAP EBIT, and GAAP net profit (2%), 7% and in-line vs. our est., and in-line, 4%, and 13%, vs. consensus respectively.
• Xiaomi’s recent run could be short lived, as (1) Huawei will soon launch mid-range 5G handsets, (2) the Mi 14 will soon face new high-end Android competition;
• And (3) its underinvested EV project could disappoint. We maintain our SELL rating and HK$ 12.6 TP, implying 28x CY24 P/E.

• Aeon and Seven & I both have large financial services arms, generating a substantial share of consolidated profits.
• With cashless payments now the norm, the old business models that relied on fees for cash dispensing are fast becoming outdated.
• Both retailers plan major changes to create ecosystems that should deliver a lot more data to improve targeted marketing for e-commerce and retail stores.

• The ¥100 Shop chains are facing higher COGS on one side and rising wages on the other, a problem when you run a fixed price chain at just ¥100. 
• Most (except Seria Co Ltd (2782 JP)) have reacted by introducing new, higher priced lines led by Daiso.
• Watts, the smallest chain, is now catching up and higher priced lines will make up a third of stock by 2027.

• By offering 15k and 30k/m 3nm capacity by 4Q24/4Q25 to Intel, TSMC will see Intel becoming one of its top 3 customers by accounting for 12% of TSMC 2025 sales
• By leveraging 3nm outsourcing, Intel will have incremental sales/capacity growth of 19-20% per year by accounting for 28%/44% of sales in 2024/2025, beating consensus’ 14%/9% y/y sales growth for 2024/2025.
• We estimate 30-35% 5 years EPS CAGR for Intel, driven by TSMC’s 2/3nm foundry support, lower cost and process R&D, lower capex and depreciation cost, and AI PC CPU launch.

• In Apr 2023, ZJLD Group (6979 HK) raised around US$676m in its HK IPO. While it initially had a turbulent listing, the shares are now trading above its IPO price.
• ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu. 
• In this note, we will talk about the company’s past performance and future prospects.

• In 3Q23, Bumrungrad Hospital Pub Co (BH TB) reported 18% YoY revenue growth to THB6.8 billion, driven by 27% and 20% YoY growth in Thai and expat patients revenue, respectively.
• Revenue from international patients grew 16% YoY, driven by Middle-east and China, which grew 31% and 21%, YoY, respectively. EBITDA, PAT, and their respective margins reached record high in 3Q23.
• Due to heavy revenue exposure in Middle-east, the ongoing tension in the region is acting as a setback. Bumrungrad shares tumbled ~15% over the last one month.

• BOC Aviation (2588 HK) (BOCA) is the highest-quality aircraft leasing company, with a young asset portfolio, quality clientele, cheapest credit facility, and superb risk management.      
• Outlook is attractive, strong demand and scarce supply ensures high lease rates and profits. Asset disposals have all recorded a healthy surplus, a potential earnings surprise. 
• Our TP of HKD70/share implies 0.94x FY24 (22% UPSIDE) potential 

• Anta Sports Products (2020 HK) is the second largest China sportswear company at 20% market share in 2022.
• The thesis for Anta lies in Anta’s above-industry earnings growth for the next 3 years, low market expectations on China sportswear sector, and flexible multi-brand strategy.
• Anta trades at a forward PE of 17x based on estimated 2024 earnings, with around 15-20% expected net profit growth in 2024-2026.

• Bangladesh’s garment industry grapples with a 14% export dip, prompting worker unrest over wage discrepancies.
• Efforts by a wage board fall short as workers advocate for a Tk25,000 minimum, seeking fair compensation.
• Economic turbulence looms as 3,500 factories, constituting 85% of exports, confront closure amid widespread unrest.

• Kuaishou’s 3Q2023 earnings beat consensus estimates with significant improvement to the company’s profitability driven by growth across all business segments.
• Operating losses of the overseas segment has further reduced, and new offerings such as paid mini dramas have been driving strong growth for the company.
• Though Kuaishou’s share price has moved up during the last few months, valuation multiples are at a steep discount to historical multiples, suggesting there is further upside.

• Medtronic Plc (MDT US) reported Q2FY24 revenue of $8B, representing 5% organic growth, topping guidance of 4.0–4.5%. Cardiovascular, neuroscience, and medical surgical grew mid-single-digit with diabetes accelerating to high-single-digit.
• The company now expects FY24 organic revenue growth of 4.75% versus the prior 4.5%. Medtronic raised FY24 adjusted EPS guidance to $5.13–5.19 from $5.08–5.16 earlier.
• In November, the company has received FDA approval for innovative renal denervation device for the treatment of hypertension, which should open a multi-billion-dollar market opportunity.

• The turnaround of sports business at China Dongxiang (3818 HK) is very welcoming. We are glad that sales trend in Oct-Nov is sustained and Phenix brand is well-received.
• Reported losses widened as poor market environment enlarged investment losses. However, net cash and investment portfolio are still valued at Rmb8.5bn, or 5.9x its market capitalisation. 
• CNDX looks comfortably at over 6% full-year dividend yield. Together with just 0.15x P/B, there are enough protections for the downside of the stock.  

• Sunpower reported 9M23 results which showed the company performing strongly as a 100% GI business.
• Revenues +15% and EBITDA +46% YoY. Earlier this month a competitor listed in China at a massive premium to Sunpower’s valuation.
• The uncertainty over the CB due in April 2025 will be an overhang but management believes there are multiple ways to resolve this in FY2024.

• Price momentum in October was negative, but decline moderated somewhat
• Disparate Q3 profitability trends reported by Maersk, Evergreen, and ZIM 
• As sentiment weakens (again), we also see signs of a cyclical bottom

• After COVID-19, China healthcare has been under pressure for a long time. High interest rate environment is unfriendly to companies, but the current situation is not entirely devoid of opportunities.
• GLP-1s has reignited investors’ interest in this industry, which will be long-term opportunity and bring alpha. With rich domestic/overseas catalysts ahead, related share price performance is worth looking forward to.
• Among the domestic GLP-1s companies, Innovent is our top pick. The “concept validation” of Innovent’s business model has been completed. A qualitative change in the Company is coming soon.  

• We once called Uniqlo the Toyota of clothing. And this remains apposite. Its consistent, reliable quality, focus on supply chain efficiency, and increasingly global renown make it a solid bet.
• The majority of the growth last year came from overseas markets, including even the US and Europe and the appointment of Daisuke Tsukagoshi as president will boost overseas performance further.
• Fast Retailing is talking up the potential of GU, which should make up for lower domestic growth from Uniqlo but also now thinks it can make it a global brand.

• Nvidia’s street-beating results indicate strong growth to continue; Generative AI demand will next expand from startups, consumer internet, and cloud service providers increasingly to enterprise AI-linked demand.
• Nvidia is not expensive despite recent market concerns. We believe Nvidia can meet or even beat its current calendar year 2024 earnings expectations and forward PE is cheap.
• Short a basket of Taiwan AI concept stocks vs. a core Nvidia long position rather than take profits in Nvidia. We have swapped one Taiwan stock in our short basket.

• Trip.com reported strong Q3 earnings, reflecting 2023’s ongoing tourism revival
• Net Income beat expectations, and company made progress on expense control
• But we don’t see “game-changing” numbers in Trip.com’s latest earnings release

• Nvidia Results Today U.S. Time — Taiwan Market Surged Recently on Improving AI/Semiconductor Expectations and Potential for Easing U.S.-China Tensions.
• Taiwan: Underowned, Yet Gaining on Peers. Our Fellow Insight Provider Analyzes Why Taiwan Might Still Be Underowned.
• Asia Geopolitics: Following Biden-Xi Meeting, Asia Is a Safer Place For Now.

• TSMC: 7.4% Premium — Previous Short Has Worked, Now Wait For Better Levels
• ChipMOS: -2.0% Discount — Good Level to Go Long the Spread
• CHT: -1.2% Discount — Good Level to Go Long the Spread

• Asahi Intecc (7747 JP) is poised for multi-year growth through strong market demand for its technically superior guidewires, market leadership positioning, new product launches, and direct marketing initiatives.
• In FY24, Asahi Intecc aims to achieve revenue of ¥100B (+11% YoY), a significant milestone. The company targets revenue of ¥110B and an operating profit margin of 23–25% in FY26.
• Asahi Intecc is expected to be a continued beneficiary of global procedure volume recovery. The company is likely to achieve its medium-term business plan ahead of schedule.

• NetEase reported revenue/non-GAAP operating profit/GAAP net income inline/5.24%/16.2% vs. our estimation.
• The bottom-line beats were primarily attributed to the operational efficiency achieved through the usage of AIGC tools, and reduced S&M expenses resulting from organic traffic generated by high-quality game content.
• We maintain our BUY rating and raised TP to $138 for future game releases, implying 19x PE, and it is currently trading at 17x PE in 2024

• Panasonic Holdings Corporation (PHD) is entering a strategic partnership with Apollo Global Management, involving the partial sale of its ownership in Panasonic Automotive Systems Corporation (PAS).
• PAS, historically known for car stereos and navigation systems, has expanded into automotive electronics, holding approximately 15% of the global Automotive Digital Cockpit market with $3.6 billion in sales.
• Despite a bearish view on Panasonic, this deal is seen as a positive step toward streamlining the group structure and concentrating on core, sustainable growth areas.

• Nvidia reports/guides a better than expected 3Q/4Q23 sales, margin, and EPS on stronger AI GPU sales growth of nearly 3x.
• Nvidia reports a healthy 3.04 MOI, down 5% q/q and down 37% y/y and contributes nicely to account for 9% of TSMC sales.
• In spite of concerns on good news priced in, seasonal weaker 1Q24, and MI300X/ASIC alternative AI solutions, we expect more raise to come in 2024-2025E.

• TSMC’s N2 technology is currently undergoing verification for a 256Mb SRAM, and it will be implemented in Hsinchu and Kaohsiung, Taiwan.
• The TSMC N3 technology capacity was 65kwpm in 3Q23, and the current version is N3B, which were adopted by Apple for the iPhone 15 this year.
• Both N3E and N2 only have 20 layers EUV masks.

• With P/B back to the 5-year average of 1.9x but ROE surpassing the last five years, Air China Ltd (753 HK) is our High Conviction pick for 2024.
• Lower US interest rates next year will reduce interest expenses as 18.7% of debt is USD-denominated. Potential Rmb appreciation vs. USD may bring significant exchange gain too.
• Supportive government policies will further drive domestic traffic. For international traffic, more capacity resumption will power recovery. Cathay Pacific Airways (293 HK) is another profit accelerator.

• BZ reported 3Q23 cash billing 0.8% higher than our est., revenue beat our estimate/consensus 5.2%/3.8%, non-GAAP NI beat our estimate/consensus by 103%/50%.
• Cost saving and investment income are the main reasons for bottom-line beat, which we think are not sustainable.
• Even BZ can deliver its “3 years with 100mn new users” target until 2025, we think its 20% earnings CAGR in 2023-25E still cannot justify its high valuation (TBC)

• Optimism for improved shareholder returns through IPOs diminishes further as Alibaba (ADR) (BABA US) puts the Cloud spinoff on hold.
• Jack Ma’s sale of 10m ADS, representing 5% of his Alibaba holdings, sparks concern. Investors should worry about his lack of optimism.
• With the Cloud IPO on hold, Alibaba Group Holding (9988 HK) is vulnerable to numerous downside catalysts, as outlined below.

• In-Line results were overshadowed by company’s pullback from March restructuring plan and Jack ma’s family trust selling shares.
• Worst sell-off in a year was over-reaction as abrupt changes unnerved investors who tended to interpret the events  with excessive negative sentiments.
• Valuation almost priced in a scenario where company is overtaken by PDD in faltering Chinese economy. Selling amidst this extreme pessimism is the last thing investors want in our view. 

• Alibaba’s cloud servers experienced downtime for more than three hours.
• Kuaishou achieved success in the Singles Day sales and we expect a high growth rate for “other revenue” in 3Q23.
• Tims China’s revenue grew strongly with aggressive expansion of new stores.

• We expect total revenue will grow by 24% in 3Q23, as catering has been recovering in China.
• We expect Meituan can still earn positive operating profit 3Q23, as the company cut salespeople’s bonuses.
• We also believe that the stock has an upside of 87% for year end 2024.

• HK & China CRE credit impaired loans are rising sharply and high in 3Q23. We believe there is risk that the bank has to take much higher credit costs.
• Not only Mainland China CRE where there are risks. HSBC shows its ECL coverage ratio for HK CRE rising 45% over the past nine months, from 4Q22 to 3Q23.
• LT credit costs shows HSBC’s provisioning is like during a benign environment, at ~1/3 of its LT average. Its +34% QoQ credit costs in 4Q22 is worth keeping in mind.

• Major change of gameplan – Q1-3 FY12/2023 results were weaker than expected with the company revising down FY guidance, and withdrawing both current medium and long-term plans given highly challenging business conditions.
• An overview plan of structural reforms has been unveiled, focusing on becoming a more resilient and profitable business, realigning product lines, and rebuilding sales and production setups.
• Although an ambitious initiative with a wide scope, we believe that this will have a positive impact of significantly accelerating transformation initiatives, and transitioning the company to a more optimal business model.

• US Global Jets ETF (JETS US) surged by 6.6% last week, bringing the YTD to -2.1%. The strong move was in tandem with U.S. major indexes, but at 3x greater
• Positive fund inflow of US$92m, the second month in a row, reversing 17 months’ downtrend. Accumulation suggests the bottom is over, and investors turning positive on the aviation sector 
• Maintain TP of US$19 (+14% UPSIDE), but it might be a good idea to protect the downside with a short-term Put option, last week’s action was too fast and furious 

• Hygeia’s asset-heavy model leads to a situation of expense “front-loading” and profit “back-loading”.Management’s attitude towards profit is “thought-provoking”.It’s best for investors not to have high hope for Hygeia’s profit margin.
• Hygeia can maintain 30%+ growth in short term, but revenue growth could fall to 15-20% in the future due to lack of high-quality M&A targets and uncertainties brought by anti-corruption.
• Revenue forecast is about RMB4 billion in 2023 and RMB5-5.5 billion in 2024. P/E of 30-40 is reasonable range at this stage, which would drop afterwards. Current valuation is expensive. 

Deutsche Börse, a German markets infrastructure provider, operates through four divisions: Trading & Clearing, Securities Services, Data & Analytics and Fund Services. Trading & Clearing handles regulated market securities including derivatives, commodities, cash equities and foreign exchange, as well as providing market data. Data & Analytics – through its Institutional Shareholder Services (ISS) and Qontigo subsidiaries offers quality-focused ESG, data and analytics products alongside indices such as STOXX and DAX. Securities Services manages settlement, custody, collateral and liquidity. Fund Services provides a comprehensive service offering data, distribution and processing(safekeeping). Both Security Services and Fund Services are operated on its leading platform, Clearstream, the largest asset holder in Germany.

• Reports 3Q23 revenues of $5.8 million and positive adjusted EBITDA of $405K, up from $2.1 million and negative ~$2 million, respectively, in 2Q23.
• The improved results reflect additional contributions from new projects that began ramping up in 2Q23, along with lower SG&A that reflects the cost-cutting efforts enacted earlier in 2023.
• We note that comparisons to 3Q22 are not meaningful given the company’s pivot to mostly hosting contracts at its data centers rather than proprietary Bitcoin mining where it recognized both higher revenues and costs.

• Non-Core items boosted Q3 earnings, but core margins plunged vs Q2
• In a surprise move, ZTO has abandoned its aggressive pursuit of share
• Medium term growth is likely to slow, and pressure on margins remains

• OpenAI was founded in 2015 by investors, including Elon Musk, Reid Hoffman, Peter Thiel, AWS, and YC Research.
• The goal was to pursue Artificial General Intelligence (AGI) safely for the benefit of humanity.
• There was an initial pledge of $1 billion, but the money that came in was $100 million from Elon Musk and $30 million from Open Philanthropy.

• Besides turnaround in the bottom line, Sa Sa International (178 HK) achieved good store efficiency improvement and enviable cost control. It will enjoy further operating leverage.
• The 5.3pp sequential increase in sales contribution from tourists highlights its position to benefit from revival of tourist arrivals. Three to-be-opened stores will boost sales momentum. 
• Initial sales figures for 3QFY24 point to 27% overall sales growth, which is encouraging. Sa Sa stays in a very solid financial position with HK$196m of net cash.

• The Keepers Holdings (KEEPR PM) reported a soft Q3 2023 with revenue up 6.7% YoY and profits 4.5% YoY (ex-one offs of 38 mn pesos profits up 11% YoY). 
• The company guided a good build-up into Q4 2023 as the festive season showed signs of a good pick-up. 
• Trading at 8.2x/7x FY23e/24e with a 5.4%/6.3% dividend yield, we like the name, although there are a few short-term risks on working capital that the company needs to address.

• BABA reported C3Q23 revenue, non-GAAP operating profit and GAAP net income in-line, 6% and (7%) vs. our est., and in-line, in-line and (14%);
• Instead of appointing capable management to oversee key subsidiaries, BABA backpedalled to call off its spin-off plans;
• We cut TP from US$ 127 to US$ 72, and downgrade to SELL.

• Tencent reported C3Q23 revenue, non-IFRS operating profit and IFRS net income (2.4%), 8.9% and 17% versus our estimates. The bottom-line beat was mainly due to the growth of high-margin businesses;  
• We view commercialization of Video Accounts and expansion of overseas gaming are still at early stage.
• Progression of these high-margin, high-quality business will persist into 2024;  We maintain BUY but raise target price to HK$ 432. 

• JD.com reported in-line revenue and a non-GAAP net profit beat of 12% vs. consensus, mainly due to the 145% beat by subsidiary JD Logistics (JDL).
• 3Q GMV grew low-single digit and growth could remain similar in 4Q given the high-COVID related FMCG base. JDs GMV may reaccelerate in 2024 as smartphone and FMCG growth returns.
• Meanwhile, JD lowered the minimum spend required for free shipping, which we expect to lead to accelerate parcel volume growth for JD Logistic. 

• XPeng C3Q23 top line, non-GAAP operating loss and GAAP net loss in line, 28% and 68% worse than our estimates, main reason is G3’s End-Of-Production charge to the gross margin
• We expect XPEV to experience tough transition in 2024 since product line which spans across sedan and SUV, shall experience severe competition at a time when its differentiation is eroding.
• We prefer to wait out this period; we cut TP of XPEV from US$18 to US$9 and downgrade to SELL.

• The 2023 NRDL negotiation has officially begun since Friday. Pharmaceutical enterprises predict the price reduction would be more reasonable. But some company representatives were dissatisfactory with first-day negotiation results. 
• Although there’re many optimistic judgments about the improved financing environment in both China and overseas markets, this may not be the case. Based on the data, we remain cautious instead.
• As the disposable glove market gradually shows a warming trend, we are optimistic that Intco Medical would achieve a performance reversal in the future. The current valuation has bottomed out.

• JDH reported C3Q23 top line and non-IFRS operating profit that are 39% and 34% of our C2H23 estimates. We cut C2H23 top line, non-IFRS operating profit and IFRS net income.
• We keep 2024 top line unchanged but cut non-IFRS operating profit by 31% as we believe JDH might need to invest to explore new growth opportunities;
• We cut TP from US$65 to US$52 but maintain BUY.

• Bangkok Dusit Medical Services (BDMS TB) reported Q3 revenue of RHB26.7 billion, up 11% YoY, driven by international and Thai patients revenue growth of 19% and 9%, YoY, respectively.
• International patient revenues increased from a recovery of fly-in patients from Qatar (+81% YoY), China (+42% YoY), and Cambodia (+11% YoY). Moreover, Thai patient revenue was aided by seasonal epidemics.
• BDMS has revised 2023 hospital revenue growth guidance upward to 9–10% YoY from 6–8% previously. However, EBITDA margin guidance was kept unchanged at ~24%.

• TME reported C3Q23 revenue, non-IFRS operating profit and IFRS net income inline, 12.9%, 2.3% vs. consensus. The bottom-line beat mainly due to the cost-effective operation and music subscription services.
• We notice TME has become less reliable on live streaming and more on monetizing its user base through ARPU enhancement
• We upgraded TME to BUY and raised the target price to US$ 9.7, implying a 21.1x PE ratio compared to its current trading at 17.8x in 2024.

• Atour reported 3Q23 revenue 6.4%/17.1% higher than our estimate/consensus, non-GAAP NI 5.5%/9.1% higher than our estimate/consensus.
• We expect Atour 4Q23/2023 RevPAR recovered to 107%/114% of 2019 level, and revenue to increase 104%/96% YoY respectively.
• We maintain the stock as BUY rating, and raised TP by US$1 to US$37.5, reflecting the rapid growth of retail product sales.